Sourlos v Luv a Coffee Lismore Pty Ltd
[2008] FMCA 771
•28 May 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SOURLOS v LUV A COFFEE LISMORE PTY LTD | [2008] FMCA 771 |
| PRACTICE & PROCEDURE – Application for adjournment to allow time for consideration of an application under s.78 Judiciary Act 1903. |
| Judiciary Act 1903, s.78 Bankruptcy Act 1966, s.40F(g) |
| Applicant: | THEO SOURLOS |
| Respondent: | LUV A COFFEE LISMORE PTY LTD ACN 109 736 414 |
| File Number: | SYG 779 of 2008 |
| Judgment of: | Raphael FM |
| Hearing date: | 28 May 2008 |
| Date of Last Submission: | 28 May 2008 |
| Delivered at: | Sydney |
| Delivered on: | 28 May 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr R B Wilson |
| Solicitors for the Applicant: | McLachlan Chilton |
| Solicitors for the Respondent: | Harris & Co |
ORDERS
Application for adjournment declined.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 779 of 2008
| THEO SOURLOS |
Applicant
And
| LUV A COFFEE LISMORE PTY LTD ACN 109736414 |
Respondent
REASONS FOR JUDGMENT
I am asked in this matter whether I can grant an adjournment to the applicant on the grounds that he has made a reference pursuant to s.78 of the Judiciary Act 1903 claiming that there is a constitutional issue in the matters raised in these proceedings.
I have had the benefit of reading an affidavit of Michael John Szwar sworn on 28 May 2008 which contains the correspondence passing between the applicant's solicitors and the Attorney General for the Commonwealth and the Attorney General for the State of New South Wales.
The way in which the constitutional issue is articulated in the letter of 13 May 2008 is as follows:
"The base of the Application is that there is concurrently a Mareva injunction, that is an asset freezing order in the District Court of New South Wales in proceedings number 5272 of 2004 which effectively prevents Mr Sourlos from realising such assets as would enable him to pay the Judgment sum …
In the Applicant's respectful contention the Respondent is attempting to restrict any disposition of assets subject to the exception specified in the formal District Court Orders but at the same time requires the debtor to pay the Judgment sum …
It seems to this office that there is a potential constitutional issue such as would grant a reference pursuant to s.78 of the Commonwealth Judiciary Act."
It will be seen from the part of the letter extracted in these reasons that the s.78 reference is contingent upon it being established that the effect of the asset freezing order in the District Court is to prevent payment of the sum of money allegedly owed and required to be paid under the bankruptcy notice.
The weight of authority in the Federal Court, much of which has been carefully articulated in the helpful written submissions of the respondent, is that one of these notices would not, in fact, constitute the staying of the orders of the District Court in such a way that it would constitute: "a judgment or order, the execution of which has been stayed” under s.40F(g) of the Bankruptcy Act 1966.
It seems to me that it is appropriate in these circumstances for me to hear the case and decide whether or not that weight of authority can be distinguished because if it cannot then the constitutional issue does not arise. If it can be distinguished then the applicant will succeed in any event.
I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of Raphael FM
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